The Collapse of QuadrigaCX: What We Know (And What We Don’t)

The Collapse of QuadrigaCX: What We Know (And What We Don’t)

QuadrigaCX, the Canadian cryptocurrency exchange, made headlines world last week when it announced it was filing for creditor protection and owed upwards of $130 million or more to its customers. The long-suffering exchange has had banking issues for more than a year, and customers complained they could not easily withdraw fiat or crypto over the past several months. Fears that the exchange may be insolvent or running a scam were exacerbated by an announcement that its founder and CEO, Gerald Cotten, died of Crohn’s disease while in India. After weeks of poor communication (and several days of the website going offline entirely), the exchange announced it was filing for a stay of proceedings in an attempt to head off any customer lawsuits while it tries to recoup its funds and figure out its next steps. The situation as a whole carried echoes of the Mt Gox scandal, both in terms of the degree of global interest (many mainstream news outlets and publications have run stories, centered primarily around the stated inability to access customers funds following Cotten’s death) and the scale of future uncertainty. As CoinDesk reported on Tuesday, the legal picture surrounding the exchange is beginning to solidify. A Nova Scotia Supreme Court judge granted the exchange its application, giving it a 30-day stay of proceedings to try and recover any cryptocurrencies, as well as find other avenues for reimbursing customers. Yet many questions swirl around the proceedings, further fed by the theories propagated by QuadrigaCX customers, observers and critics. Below, we explore some of the biggest questions as they currently exist. What we know Quadriga owes a lot of money QuadrigaCX says it owes roughly 115,000 people some C$190 million in both fiat and crypto. These 115,000 customers are part of a larger group of nearly 300,000 individual accounts created, though it appears that the remainder doesn’t currently store any funds on the exchange. In a court filing last week, Robertson claimed that neither she, nor anyone else on the QuadrigaCX team, knew how to access the exchange’s crypto reserves – or indeed, where they might even be located. The exchange holds roughly 26,500 bitcoin ($92.3 million USD), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), nearly 200,000…

Zcash Bug Demonstrates the Difficulty of Auditing Complex Cryptocurrencies

Zcash Bug Demonstrates the Difficulty of Auditing Complex Cryptocurrencies

A recent counterfeiting bug in Zcash demonstrates that the added functionality of so-called second generation blockchains comes at a price. The vulnerability, which existed for years before being patched in October, could have been exploited to generate additional coins. As every major cryptocurrency since Bitcoin has demonstrated, added complexity corresponds with lower security. Also read: Australian Banks Fraudulently Collected Fees From Deceased Customers Zcash Vulnerability Lay Undiscovered for Years On Feb. 5, the Zcash team shared a blog post acknowledging the existence of a bug that had been in place since the privacy coin launched. Discovering its existence would have called for “a high level of technical and cryptographic sophistication that very few people possess,” claimed Zcash developers. While likely true, this admission has provided little comfort to zcash holders, and doesn’t augur well for any future bugs that have yet to be discovered. It stands to reason that any elementary exploits in the protocol will have long since been identified. As such, any critical Zcash bug to surface at this stage can be assumed to require sophisticated knowledge to pinpoint. Great point by gmaxwell on the Zcash inflation exploit: contrary to what their announcement suggests, they do _not_ know if it was exploited or not. Supermajority of shielded funds are still in the vulnerable Sprout; if that was inflated, last out out loses. So get out now. — Peter Todd (@peterktodd) February 5, 2019 Common sense holds that the less moving parts a device has, the less there is to go wrong. The same concept applies to cryptocurrencies. With the addition of enhanced features such as smart contracts and complex privacy tech like zk-snarks, code becomes harder to audit, and it can be virtually impossible to determine whether vulnerabilities have been exploited. Bitcoin Core is not immune to vulnerabilities, with a bug that had lain undiscovered since 2016 only identified and patched last year. The relative simplicity of Bitcoin’s design, however, means it has less possible attack vectors, having survived a decade of adversarial probing by governments, research groups, and hackers. Mixed Reactions to Zcash Response The disclosure of the vulnerability was greeted with a mixed response. Edward Snowden, who has previously signaled his support for the privacy coin, praised its well-funded developer team who…

Earn BAT while trying out the blockchain-friendly Brave browser

Earn BAT while trying out the blockchain-friendly Brave browser

We’re launching a new Coinbase Earn page where you can earn Basic Attention Tokens (BAT) Today we’re launching a new Coinbase Earn opportunity with lessons about BAT, the Basic Attention Token. If you’ve received an invite to the Coinbase Earn BAT opportunity by email, you can go to the Earn BAT Page to start completing the educational lessons and earn up to $10 worth of BAT in the process. Basic Attention Token seeks to improve the efficiency of digital advertising with a token that can be exchanged between publishers, advertisers, and users on the Ethereum blockchain. The token can be used to obtain a variety of advertising and attention-based services on the BAT platform and the Brave browser. Along with the series of educational videos where you can learn more about the Brave browser and BAT, customers will also have the option to earn BAT by using the Brave browser. We hope this will encourage people to explore and use utility tokens first-hand in their native environments, like the Brave browser. We see these interactive, advanced lessons in cryptocurrencies and tokens as an important step toward building awareness and usage of utility use-cases in the crypto ecosystem–one where a beginner can quickly get up to speed on a token in a few minutes, actually engage with the product, and earn some of that token along the way. We think learning about crypto and earning crypto is a great way to get people to evaluate and use more utility tokens without having to buy them outright. We expect earning to become an increasingly important function in the crypto ecosystem– alongside buying and mining– especially when paired with education. We hear from people that they’re always looking for trusted sources to educate themselves about new developments in crypto, and we want to help serve that need. If you haven’t received an invite yet, don’t worry — you can still view all content on the Coinbase Earn BAT page for free, and you can join the waitlist to be notified once earning opportunities become available to you. If you want to stay informed about future opportunities, please make sure you have verified your identity and opted in to marketing communications with Coinbase! Lastly, you can check out the newly launched…

Circle’s Stablecoin Pitchman Joins Blockchain Startup Celo

Circle’s Stablecoin Pitchman Joins Blockchain Startup Celo

Chuck Kimble, head of financial institution (FI) partnerships at Circle, has left the company for a similar role at another blockchain startup, Celo. As Celo’s new head of strategic partnerships, Kimble will be helping the digital payments company “to bring better financial products to emerging markets and under-served populations around the world,” the company said in a press release. “Chuck brings a ton of business development and digital payments experience to Celo and he’ll play an instrumental role in encouraging the development and scaling of products globally,” Celo founder Rene Reinsberg said. “Chuck is highly respected in the financial tech industry and he understands how digital payment services can help people and families with no access to financial services.” Kimble joined Circle in June of last year. During his tenure at the crypto trading and payments firm, he led business development and promotion of USDC, a cryptocurrency designed to hold its value with the U.S. dollar, or stablecoin. Naeem Ishaq, Circle’s Chief Financial Officer, told CoinDesk: “Chuck joined Circle to lead our FI partnerships efforts and participate in a variety of projects, including work on the adoption of USDC. In his short time with the company, he helped to drive USDC adoption across a diverse cross-section of the crypto industry.” USDC is now the second-largest stablecoin by market capitalization and the No. 19 cryptocurrency overall, according to CoinMarketCap. Payments veteran Before Circle, Kimble spent three years at Dashlane, the maker of a password manager and digital wallet application. He also worked for three years at Square and oversaw partnerships at Visa, supervising the company’s teams in New York, Miami, Singapore and London, with responsibility for account strategy, business planning, recruiting and coaching, according to his LinkedIn profile. “I’ve spent the vast majority of my career advancing digital payments and I see tremendous opportunity for Celo to improve the livelihood of billions of people around the world who today are involuntarily detached from the global financial system,” Kimble said in Celo’s press release. In September, Celo added another top manager to its team when former Ripple general counsel Brynly Llyr joined the startup in the same role. Celo’s investors include Polychain Capital, Andreessen Horowitz, Coinbase Ventures and Square founder Jack Dorsey. Chuck Kimble image courtesy of Celo UPDATE…

BCH-Powered Paybutton Launches in Pre-Release

BCH-Powered Paybutton Launches in Pre-Release

On Tuesday, Feb. 5, the well known Bitcoin Cash (BCH) advocate Soupernerd announced the pre-release and testing phase of a new BCH-powered payment button. At the moment the Paybutton.cash application will feature a simple payment button but there are plans to integrate other features down the line. Also read: Markets Update: Traders Patiently Wait for Crypto’s Longest Bear Run to End Paybutton Developer Launches Pre-Release and Announces Testing Phase There’s a new payment button called Paybutton.cash that allows people to easily send and tip bitcoin cash to content creators, services, and websites. The full release of the application is not complete yet but the developer known as Soupernerd has announced the pre-release and testing phase. Soupernerd says the Paybutton team is currently waiting for Badger Wallet updates before activating that as a payment option and there is more to be tested. “Paybutton.cash is pleased to announce our pre-release launch and testing phase,” explained Soupernerd on the Reddit forum r/btc. “Host a paybutton on your site with just snippet of code and convert 160+ currencies to BCH live — [Paybutton] is fully hosted on Github.” The Paybutton.cash website. The Paybutton creator explains that a lot of credit goes to the Bitcoin.com and Badger Wallet development teams for making the platform possible. Moreover, Soupernerd says the Paybutton developers have a few more ideas in mind that go beyond just a simple payment button. On the r/btc thread, Soupernerd describes a static badge concept which could be placed next to the BCH Zoo. Further, the creator shows images of a donation badge and mentions a concept called “Paybutton Carts.” “More on that later,” says Soupernerd. “We will keep the pre-release folders up, even upon new releases until further notice.” The creator of Paybutton, ‘Soupernerd,’ is well known in the BCH community. Other BCH-Powered Button Applications in the Works The Paybutton platform joins two other BCH payment button applications that are also in early development stages. The applications started spawning after Ryan X Charles removed bitcoin cash support from his Money Button project and decided to support the coin BSV. Following the Money Button departure, the team behind Badger Wallet has been working on refining a BCH payment button. Another competitor to the Money Button is the bitcoin cash payment…

Is ConsenSys Startup Token Foundry Dead or Doing Something Different?

Is ConsenSys Startup Token Foundry Dead or Doing Something Different?

Token Foundry set out last year to be the best platform for running initial coin offerings. The website of the ConsenSys-incubated startup said as much until as recently as January 21. Then, over the next few days, it would articulate two more missions before finally settling on a new goal: “This year we are adding new ways to conduct cryptocommerce.” But, as three sources with knowledge of the situation tell CoinDesk, Token Foundry isn’t likely to deliver on any mission at all, saying it’s essentially a ghost ship at this point. Jay Thakrar, the chief operating officer of both Token Foundry and ConsenSys Digital Securities, disputes that assessment. “Token Foundry has not shut down,” Thakrar told CoinDesk in an email. “The information you have received is not correct.” Thakrar wrote in a follow-up message: “Token Foundry is focused on building sustainable decentralized networks and enabling purchasers to safely buy vetted tokens. … We learned that there is a long tail market of potential purchasers that do not know how to participate in the Web 3.0 world, and as a result, we are building additional software to help responsibly bridge that gap.” Observers have questioned the fate of the company since founder and CEO Harrison Hines left ConsenSys in August 2018, just four months after Token Foundry debuted. Hines now runs a company called Terminal Systems, which employs at least five other ConsenSys alums, according to LinkedIn. “There’s no one left at Token Foundry – anyone still employed under that banner actually works on ConsenSys Digital Securities,” a person with knowledge of the situation told CoinDesk on the condition of anonymity. “They just haven’t killed the brand yet because it’ll be a bad look.” For his part, Hines told CoinDesk in a text message: “Having a good founder/leader who is passionate about the vision and the mission is critical to a startup’s success and keeping the team motivated and together.” Perhaps alluding to ConsenSys founder Joseph Lubin, who reportedly owns the large majority of each of the venture studio’s startups, Hines added: “I’ll never start a company again that someone else has control of.” Revenue driver? Token Foundry launched in April 2018, and by summer Lubin was painting the “spoke” as a standout success. At an event in Brooklyn on August 20, CoinFund founder Jake…

Yellow Vest Movement Starts a New Form of Protest – Burning Banknotes

Yellow Vest Movement Starts a New Form of Protest – Burning Banknotes

For well over two months, the yellow vest movement in France has continued to keep itself illuminated with fervent protests against taxes, the banking system, and the region’s bureaucrats. On Feb. 1, a group of Gilets Jaunes working at the bill printing factory explained their plan to show the world they mean business by burning pallets of bills, starting with Israeli banknotes. Also Read: Embracing Utility in 2019: Unreliable Crypto Networks Will Lose to Hyperbitcoinization Yellow Vests Burn Stock of Foreign Bills The grassroots yellow vest movement in France has consistently made headlines across the world while protesting the country’s monetary system and politics. For instance, on Tuesday, Feb. 5, about 18,000 Gilets Jaunes joined a march in the French capital walking side by side with another 12,000 CGT union workers. The protest also followed a demonstration on Friday, which showed employees claiming to work for the Banque de France banknote mill. The yellow vest associated group threatened to burn large sums of paper banknotes. A news.Bitcoin.com correspondent from France explained how the bill burners are demanding fiscal and social justice in a unique fashion. “In the last 15 days we’ve burned passport paper, bank check paper, and grey card paper for vehicle documents,” explains the banknote burning group’s video on Facebook. “But the French government is completely deaf, so we move to the next level — If the French government continues to make it seem as nothing scandalous is happening, we will make this so all the world will know what’s happening.” Starting today we start to burn foreign bills stock — The first paper ream we have here is for Israeli banknotes. We start with this, then we burn everything — If the French government doesn’t change, all foreign countries that are waiting for their bills, will not be delivered. Hyperbitcoinization News.Bitcoin.com has covered the yellow vest movement in the past and how many well-known bitcoiners have explained that Gilets Jaunes should really hit the banks where it hurts by moving from fiat to bitcoin. At the same time, the world economy has been shuddering once again and economists are predicting another global depression similar to 2008. Many regions like Venezuela, South Sudan, Turkey, Haiti, Zimbabwe and Argentina are suffering from economic hardships. “If…

Opera Android Users in Sweden, Norway and Denmark Can Now Purchase Ethereum via Browser

Opera Android Users in Sweden, Norway and Denmark Can Now Purchase Ethereum via Browser

The Android version of major web browser Opera now integrates a function that lets its users purchase Ethereum (ETH) through the browser, a press release shared with Cointelegraph on Feb. 6 reveals. According to the press release, the new service is available to users based out of Sweden, Norway and Denmark due to Opera’s new partnership with brokerage firm Safello. Safello, according to Opera, is registered with the Financial Supervisory Authority (FSA) in Sweden. Julia Szyndzielorz, senior PR manager at Opera, told Cointelegraph in an email that Opera’s addition of ETH purchasing through its browser allows users to immediately buy the cryptocurrency online. As Cointelegraph reported in December of last year, Opera has launched its Web 3-oriented browser for Android, with crypto wallet integration, support for Ethereum and interactions with decentralized applications (DApps). According to today’s press release, the ETH purchased using the new feature is immediately ready for use in DApps. In August last year, Opera added a built-in crypto wallet to the desktop version of its browser. Stock and crypto trading app Robinhood was also rumored last year to be adding a cryptocurrency wallet after posting a job advertisement for cryptocurrency engineers. More recently, smartphone manufacturer Brave announced that decentralized browser Brave would be the default browser on their first native blockchain phone.

Twitter CEO Jack Dorsey Says Bitcoin Is the Only Crypto He Holds

Twitter CEO Jack Dorsey Says Bitcoin Is the Only Crypto He Holds

Twitter and Square CEO Jack Dorsey has again expressed his pro-Bitcoin (BTC) stance, revealing that the sole crypto he holds is BTC, according to a tweet on Feb. 6. The known Bitcoin supporter has revealed his cryptocurrency of choice following a recent interview where Dorsey claimed that he still believes that Bitcoin will be the the native currency of internet. In a thread of the tweet that amassed over 5,000 likes, Dorsey reiterated his previous statements regarding the biggest and oldest cryptocurrency, also calling it a “great brand.” He wrote: “Bitcoin is resilient. Bitcoin is principled. Bitcoin is native to internet ideals.” When asked about the particular features of Bitcoin that excite Dorsey the most, the bitcoin bull has again pointed at Bitcoin’s potential to become the internet’s native currency. Specifically, Dorsey responded: “Everything. Mostly I think it has the greatest chance of being the Internet’s native currency. If you think of the internet as you would a country, that’s huge.” In another response on the thread, Dorsey has also hinted that Square payment operator can restart accepting Bitcoin in “near future” after failing to do previously in 2014, because the company “was not ready” for it that time. Following the statement, Jack Dorsey also tweeted today that he has joined a community experiment within the Lightning Network (LN), Bitcoin’s second-layer scaling protocol. Dubbed LN Trust Chain, the test aims to prove the functionality of transactions on LN and represents a series of transactions between users of the LN network. Within the experiment, each user receives the transaction, adds a nominal amount of 10,000 satoshis (around $0.34), and passes it to someone else they trust. The LN Trust Chain, also referred as the “Lightning Torch,” has amassed around $98 at press time. Ranked the 89th entrant in Forbes “400 Wealthiest Americans” in 2018, Dorsey reportedly has a net worth of $5.1 billion at press time. Bitcoin is almost 2 percent down over the past week, trading at $3,412 at press time with the market cap of around $60 billion, according to data from CoinMarketCap.

Circle’s Head of Partnerships Joins Blockchain Startup Celo

Circle’s Head of Partnerships Joins Blockchain Startup Celo

Chuck Kimble, head of partnerships at Circle, has left the company for a similar role at another blockchain startup, Celo. As Celo’s new head of strategic partnerships, Kimble will be helping the digital payments company “to bring better financial products to emerging markets and under-served populations around the world,” the company said in a press release. “Chuck brings a ton of business development and digital payments experience to Celo and he’ll play an instrumental role in encouraging the development and scaling of products globally,” Celo founder Rene Reinsberg said. “Chuck is highly respected in the financial tech industry and he understands how digital payment services can help people and families with no access to financial services.” Kimble joined Circle in June of last year. During his tenure at the crypto trading and payments firm, he led the development and promotion of USDC, a cryptocurrency designed to hold its value with the U.S. dollar, or stablecoin. He was also a founding team member of Centre.io, the consortium formed by Circle and Coinbase to support USDC, which is an ERC-20 token that runs on top of the ethereum blockchain. Naeem Ishaq, Circle’s Chief Financial Officer, told CoinDesk: “Chuck joined Circle to lead our [financial institutions] partnerships efforts and participate in a variety of projects, including work on the adoption of USDC. In his short time with the company, he helped to drive USDC adoption across a diverse cross-section of the crypto industry.” USDC is now the second-largest stablecoin by market capitalization and the No. 19 cryptocurrency overall, according to CoinMarketCap. Payments veteran Before Circle, Kimble spent three years at Dashlane, the maker of a password manager and digital wallet application. He also worked for three years at Square and oversaw partnerships at Visa, supervising the company’s teams in New York, Miami, Singapore and London, with responsibility for account strategy, business planning, recruiting and coaching, according to his LinkedIn profile. “I’ve spent the vast majority of my career advancing digital payments and I see tremendous opportunity for Celo to improve the livelihood of billions of people around the world who today are involuntarily detached from the global financial system,” Kimble said in Celo’s press release. In September, Celo added another top manager to its team when former Ripple general counsel…